 How do consumers respond to price complexity? Experimental evidence from the power sectorGrant Jacobsen and James I. Stewart Journal of Environmental Economics and Management, 2022, vol. 116, issue C Abstract: Spurred in part by growing production from renewable sources and adoption of electric vehicles, time-variant pricing programs for electricity are increasingly being used to influence the shape of residential demand. The most common time-variant prices are time-of-use (TOU) prices, which vary by hour of day, and event-based prices, which take effect during idiosyncratic “critical” events. We present evidence on the effects of TOU prices and event-based prices when implemented in isolation versus simultaneously. The key finding is that time-variant prices reduce demand during critical events by 19% when event-based pricing is implemented in isolation, but only 5% when TOU and event-based prices are implemented together, despite both price schemes creating similar financial incentives. The results suggest that price complexity may dull consumer responsiveness to price signals. Keywords: Price complexity; Time-variant pricing; Critical peak rebates; Time-of-use pricing; Electricity; Dynamic prices (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:116:y:2022:i:c:s0095069622000754 DOI: 10.1016/j.jeem.2022.102716 Access Statistics for this article Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates More articles in Journal of Environmental Economics and Management from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.